The Forum, Bryanston
12 February 2019

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Expect cloud ROI within a year

While migrating to the cloud is not a cheap or easy move, an average business can gain a return on investment (ROI) within a year of implementing the technology.

This is according to Pieter Potgieter, senior manager of commercial operations at IT service management company Britehouse, speaking yesterday at ITWeb Cloud Summit 2019.

Discussing the costs and rewards of cloud migration, Potgieter explained that cost savings are often the biggest driver behind the increasing deployment of cloud computing, but this should not be the main reason for implementing the technology.

"From a ROI perspective, cloud migration can be paid back within a year of deployment, but be warned: migrations are only effective if there is longevity in the application," he asserted.

"To migrate data into a new environment without transforming how the application works will not make much sense. Many organisations make the mistake of just lifting and shifting applications into the cloud, and in the long run they don't gain any value."

ROI calculation models can play a significant role in evaluating the value of cloud initiatives and are often used extensively throughout the cloud adoption process, he continued.

"How much return on investment an organisation sees will depend on how they approach cloud deployment. There are various ways to measure and assess ROI. This can be done through standard ROI models that can be applied either at the application level or at the infrastructure level.

"Organisations can also measure their pay-as-you-go usage where they decide what's important and only pay for what they use. Another popular ROI assessment model is the capacity-utilisation curve offered by Amazon Web Services to illustrate cloud capacity versus utilisation."

Potgieter warned that organisations should avoid having a hype-driven view of how much money they will spend, save and later generate by implementing cloud, and should rather focus on its long-term value-add.

"While moving to the cloud is primarily a financially complex decision, there are a lot of benefits of migrating. Cloud computing allows organisations to start business-critical projects fast and propels them into postmodern enterprise resource planning application architecture.

"In addition, cloud allows IT leaders to have an agile approach to applications; for instance, they can embrace emerging technologies such as artificial intelligence, Internet of things and other innovations at a much quicker pace."

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